Clariant, the Swiss specialty-chemicals company, announced on Friday that it has revised down its full-year guidance due to weaker demand caused by macroeconomic challenges. Preliminary results for the second quarter show a decline in sales compared to the previous year.
Revised Sales and Earnings Outlook
Clariant now expects sales for the year to be between 4.55 billion and 4.65 billion Swiss francs ($5.07 billion-$5.18 billion), down from its previous guidance of CHF 5 billion. Similarly, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to be between CHF 650 million and CHF 700 million, with an EBITDA margin ranging from 14.3% to 15.1%. This margin is slightly lower than the 15.6% reported in 2022.
Impact of Economic Environment
Clariant attributed the downward revision to the uncertainties and risks associated with the current economic environment. The company specifically pointed out concerns about the speed of the recovery in China, which it had previously highlighted at the beginning of the year. These challenges have unfortunately materialized and are affecting the entire industry.
Second Quarter Performance
In the second quarter, Clariant recorded sales of CHF 1.08 billion, a decrease from CHF 1.30 billion in the same period last year. The EBITDA for the quarter was between CHF 155 million and CHF 165 million, compared to CHF 216 million in the previous year.
Measures to Address Demand Challenges
To tackle the short-term demand challenges, Clariant has implemented additional cost-reduction measures. These measures will result in a restructuring charge of approximately CHF 30 million for 2023, higher than the previously anticipated charge of CHF 15 million to CHF 25 million.
Clariant remains focused on navigating the current economic landscape while maintaining its commitment to delivering value to its stakeholders.
